No pharma giant can thrive in a vacuum. While massive drugmakers like Eli Lilly grow through blockbuster product sales, they also rely on a wide network of earlier-stage biotechs to keep innovation wheels turning.
As Lilly has developed into the most valuable pharma company — becoming the first to reach one trillion dollars in market capitalization last month — it has also built an external drug discovery and development engine called ExploR&D that supports biotech partners with its Big Pharma capabilities. With more access to AI and supercomputing technology, and a deep bench of industry connections and platforms, Lilly’s program provides vast opportunities in early-stage R&D and an alluring way for biotechs to overcome a difficult fundraising landscape that has persisted for years.
It all started with an autonomous unit called Chorus in 2002 that focused on internal candidates. Now ExploR&D not only supports young drugmakers, but gives Lilly a way to keep its finger on the pulse of what’s happening externally in cutting-edge pharma science.
“Chorus was an experiment in how a large pharma can act like a biotech when it comes to early-phase development, being cognizant of the fact that the needs of early phase are very different from late phase,” said Dr. Thomas Hopkins, vice president and head of ExploR&D. “Several years into that model working on internal assets and applying this biotech approach, they realized that the model was highly applicable to collaborating externally.”
The most notable example of the program’s success was Lilly’s first-ever proof of concept for the molecule that would become the migraine drug Emgality approved in 2018. Originally conceived by Arteaus Therapeutics, Lilly licensed the asset and brought it through clinical development.
With a “pleasingly exponential growth curve,” according to Hopkins, the ExploR&D team has now signed more than 90 collaborations working with more than 65 biotechs under the pharma giant’s Catalyze360 umbrella of early-stage research that also includes the co-working space Lilly Gateway Labs and the VC arm Lilly Ventures.
Here, Hopkins explains ExploR&D’s beginnings, the collaborative mindset and why the pharma giant is uniquely positioned to give biotechs a leg up.
This interview has been edited for brevity and style.
PHARMAVOICE: How did ExploR&D come about from Chorus as it stands today?
DR. THOMAS HOPKINS: The current incarnation of scaling what was Chorus into ExploR&D and dedicating it exclusively to the biotechnician goes back just over three years. At the time, we weren’t sure that if we built it, they would come, but we felt that we had unique capabilities to give and a strong desire to make it easier for bold, breakthrough science to transform into medicines. The Catalyze360 initiative was starting around the same time we changed to ExploR&D, and it was bringing together some things that already existed. It had never been attempted before to use all these tools to scale them with the amount of resources and vision Lilly is putting behind this with a unified goal of helping founders advance their science.
And we’re still looking for new ways to help — this year we announced a new addition to the Catalyze360 ecosystem, Lilly TuneLabs, where the same models we’re using internally for R&D are being made available to biotechs. All of this is about democratizing access to the tools that help move science forward.
How do you work with biotechs to realize their vision while also serving Lilly’s own goals?
We have the mantra that we meet the partners where they are. We are, by design, flexible in terms of the scope of help we provide, because that goes from some limited consulting with a few people in a room to solve a problem all the way up to creating a multi-functional team, and replicating the design and execution capabilities of a biotech to enable them to run super lean from discovery to clinical proof of concept. Our aim is to make this a win for founders and funders, as well as a win for Lilly. This extends to shared-risk models where we can take on economic and operational burden while participating in some form of the upside while getting to see the data first. We love having a first-mover advantage, and it’s extremely valuable to be in the trenches with these companies, getting to know them and having them get to know us so that hopefully we’re their first phone call when the data cards flip.
For example, with a company like Insitro, we’re doing molecule discovery with a biotech that’s fantastic at creating targets but not necessarily a molecule creation expert — by licensing IP to them, we’ve structured it so there’s no cost up front for access to Lilly-quality molecules, and we take limited back-end economics to participate in the upside if those molecules move forward.
How has Lilly’s own market success over the last few years with weight loss drugs fed into this program?
A rising tide lifts all boats, and we’re in a privileged position to engage at the very earliest stage where the risk is the highest. It’s a tough time for biotech, and that’s where the greatest need is at the moment with constrained capital, rising costs and increasing complexity. We want to help the companies pursuing bold ideas to not just survive, but thrive. Why should a company that’s great at discovery science have to build from scratch something that Lilly has spent 150 years optimizing with 10,000 R&D professionals working here every single day? That kind of scale and connectivity has huge advantages if it can be deployed into the innovation ecosystem.
Another unique piece we’ve added to the model is a series of strategic agreements with hundreds of vendors, which doesn’t sound super sexy. But biotech can easily burn three to six months in the contracting stage with these vendors. It’s one of the ways we’ve thought about how we can be valuable and enabling for the companies that need it.
Walk me through the way ExploR&D finds the science worth pursuing, picking the wheat from the chaff.
We’re designed to go very broad. Lilly of course has its current therapeutic areas of focus, and we’re absolutely interested in those. But by design, we want to look at the assets, platforms and indications of the future. Companies don’t have to be within our areas of focus to get engaged. There’s also no barrier to engagement, and what we’ve seen is that the greatest opportunities for downstream benefit happen super early. We’ve worked with companies as early as the spin-out stage from academia all the way up to post-IPO. And we start with the questions, what do you need and what problems are you facing? We want companies to come to us with a problem statement, and if we feel confident we’ve got something to address that with, then we learn about their science and our involvement often increases over time.
Can you give me an example of that model in action?
One of the very first collaborations we signed as we created this new model was with a company called Paradox Immunotherapeutics with a fantastic CEO and first-time founder Natalie Galant coming out of a postdoc around breakthrough science with misfolded proteins. We’ve had the privilege of engaging from an extremely early stage to help create the molecule for their lead program and working collaboratively to bring that to patients. That culminated with a successful raise in the public domain about nine months ago. Insitro is another one where they came to us to license some of our technology to help with oligonucleotide therapeutics to develop a pharma-grade antibody candidate from their platform.
With diminished public funding for early science in the U.S., is this a private solution that could fill some of those gaps?
At any point in biotech history, there’s been a huge need for this model. There are multiple challenges facing the ecosystem at the moment that span both access to capital but also costs going through the roof and low-hanging scientific fruit being picked clean. Even the medium-hanging fruit is far more complex and multi-component. So how do we keep the pace of science moving in the face of that complexity? I think the engine we’ve created is a way to overcome that obstacle and hopefully accelerate into the future.
